ST Engineering's first quarter profit up 20% to S$111mn

The group expects higher turnover and profit for this year as it continued to get new orders as it ended the quarter with a $11.3bn order book.

Singapore Technologies Engineering Ltd (ST Engineering) on Wednesday announced double-digit growth year-on-year for the first quarter ended 31 Mar 2011. Group revenue grew 15% to $1.57 billion, profit before tax (PBT) rose 18% to $138.0m and net profit jumped 20% to $111.1m.

Group revenue was lifted by strong revenue growth in its electronics and land systems sectors. The Land Systems sector achieved 35% increase in revenue over the same period last year, mainly due to higher project deliveries by its Automotive business group, while the Electronics sector's revenue was 24% higher, due to various project milestone completions, including the Circle Line project and the Half-Height Platform Screen Doors project for LTA.

The Marine sector's revenue was 6% higher on increased shiprepair activities. The Aerospace sector had comparable revenue against 1Q2010, but it achieved 33% improvement in PBT. The higher PBT is attributed to favourable sales mix and foreign exchange impact, according to an ST Engineering report.

Commercial sales constituted 57% of revenue for the first quarter of 2011. Cash and cash equivalents and short-term investments totalled $1.85b, with $1.6b of advance payments from customers.

The Group ended the quarter with a strong order book of $11.3b, of which about $3b is expected to be delivered in the remaining months of 2011. In the first quarter, the Aerospace sector announced new maintenance contracts totalling about $320m. The Group's US shipyard, VT Halter Marine, was awarded a shipbuilding contract worth about $185m from Pasha Hawaii while VT iDirect secured a contract of approximately $77m by Inmarsat to provide satellite Ground Network Infrastructure and end-user terminal technology for Inmarsat's forthcoming Global Xpress service.

"The Group achieved strong growth in revenue, PBT and net profit in the first quarter of this year compared to the corresponding quarter of 2010. Revenue rose by 15% while margins expanded with PBT and net profit growing 18% and 20% respectively. EBIT increased by 17% over the same period, representing a robust operating performance. The Group continued to secure new orders and ended the quarter with a strong order book at $11.3 billion,” Tan Pheng Hock, President & CEO, ST Engineering said.

“The Aerospace, Electronics and Land Systems sectors did well with double-digit PBT and net profit growth.

"Barring unforeseen circumstances, the Group expects to achieve higher turnover and PBT for FY2011 compared to FY2010," Tan added.